Accounting Policies of JMG Corporation Ltd. Company

Mar 31, 2024

MATERIAL ACCOUNTING POLICIES A.1 Basis of preparation and measurement

The financial statements of the Company have been prepared in accordance with the Companies (Indian Accounting Standards)Rules, 2015 (‘Ind-AS’) issued by the Ministry of Corporate Affairs(‘MCA’).

The financial statements for the year ended 31 March 2024were authorised and approved by the Board of Directors on 28 May,2024.

The financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets, financial liabilities, derivative financial instruments and share based payments with are measured at fair values as explained in relevant accounting policies.

A.2 Use of Estimates and Critical Accounting Judgments

In preparation of the financial statements, the company makes judgments, estimates and assumptions about the carrying amountsof assets and liabilities that are not readily apparent from other sources, the estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods affected.

Significant judgments and estimates relating to the carrying amounts of assets and liabilities include useful lives of tangible and intangible assets, impairment of tangible assets and intangible assets, provision for employee benefits and other provisions, recoverability of deferred tax assets and commitments and contingencies

A3 Property, plant and equipment

An item of property, plant and equipment is recognized as an asset if it is probable that future economic benefits associated with the item will flow to the Company and its cost can be measured reliably. This recognition principle is applied to the costs incurredinitially to acquire an item of property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognized in the statement of profit and loss as incurred. When a replacement occurs, the carrying amount of the replaced part is de-recognized. Where a tangible property, plant and equipment comprises major components having different useful lives, these components are accounted for separate items.

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment. Cost includes all direct costs and expenditures incurred to bring the asset to its working condition and location for its intended use. Trial run expenses (net ofrevenue) are capitalized. Borrowing costs during the period of construction is added to the cost of eligible tangible assets.

The gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and the carrying amountof the asset, and is recognized in the statement of profit and loss.

A.4 Depreciation on Property. Plant & Equipment

Depreciation on tangible fixed assets is calculated on the basis of straight line method as per the useful life prescribed in schedule II of the Companies Act, 2013.

A.5 Impairment

At each balance sheet date, the company reviews the carrying amounts of its property, plant and equipment to determine whetherthere is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate cash flows that are Independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the timevalue of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. An impairment loss is recognized in the statement of profit and loss as and when the carrying amount of an asset exceeds its recoverable amount.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized in the statement of profit and loss immediately.

A.6 Foreign currency transactions

The financial statement of the Company is presented in INR, which is the functional currency of the company and thepresentation currency for the financial statement.

In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

Exchange differences arising on the retranslation or settlement of other monetary items are included in the statement of profit and loss for the period.

A.7 Financial assets

a) Cash and bank balances

Cash and bank balances consist of:

i) Cash and cash equivalents- which include cash in hand, deposits held at call with banks and other short term deposits which are readily convertible into known amounts of cash, are subject to an insignificant risk of change in value and have maturities of less than one year from the date of such deposits. These balances with banks are unrestricted for withdrawal and usage.

ii) Other bank balances- which include balances and deposits with banks that are restricted for withdrawal and usage.

b) Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding-

c) Financial assets measured at fair value

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of Principal and interest on the principal amount outstanding.

Financial asset not measured at amortized cost or at fair value through other comprehensive income is carried at fair value through profit or loss.

d) Impairment of financial assets

Loss allowance for expected credit losses is recognized for financial assets measured at amortized cost and fair value through other comprehensive income.

The Company recognizes life time expected credit losses for all trade receivables that do not constitute a financing transaction.

For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve Months expected credit losses is recognized. Loss allowance equal to the life time expected credit losses is recognized if the credit risk on the financial instruments has significantly increased since initial recognition.

e) De-recognition of financial assets

The Company de-recognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or it Transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the Transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amount sit may haveto pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Companycontinues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

A.8 Financial liabilities and equity instruments Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractualarrangements entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial Liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method where the time value of money is significant.

Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in the statement of profit and loss.

De-recognition of financial liabilities

The company derecognizes financial liabilities when, and only when, the company''s obligations are discharged, cancelled or they expire.

A.9 Revenue

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of discounts, taking in to account contractually defined terms and excluding taxes or duties collected on behalf of thegovernment.

a) Services

Revenue from services rendered is recognized as the service is performed based on agreements/arrangements with the concerned customers. Revenue exclude service tax/Goods and Services tax collected from customers.

b) Sale of Goods

Sale of goods are recognized when the significant risk and rewards of ownership are passed on to the customers which generally coincide with dispatch of goods sales exclude taxes.

c) Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. A.10 Income taxes

Tax expense for the year comprises current tax and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company''s liability for current tax is calculated using tax rates and tax laws enacted as applicable to the relevant reporting period.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences. In contrast, deferred tax assets are only recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to be applicable for the period when the liability is settled or the asset is realized based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end of the reporting period, to cover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are off set to the extent that they relate to taxes levied by the same'' tax authority.

Current and deferred tax are recognized as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other Comprehensive income or directly in equity, in which case the tax is also recognized in other comprehensive income or directly in equity.

A.11 Leases

The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to use that asset to the company in return for payment. Where this occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease.

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When Company is Lessee:

Finance lease

Finance leases are capitalized at the commencement of lease, at the lower of the fair value of the property or the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income over the period of the lease.

Operating Lease

Leases in which a significant portion of the risks and reward of ownership are not transferred to the company such lease is classified as operating lease, payments under operating lease (net of any incentives receives from lessor) are charged to Profit and Loss Account on straight- line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation tocompensate for the lessor’s expected inflationary cost increases.

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Mar 31, 2014

(a) ACCOUNTING CONCEPTS

i) The accounts are prepared on historical cost convention and in accordance with applicable Accounting standards except where otherwise stated. For recognition of Income and Expenses, Mercantile System of Accounting is followed,

(b) REVENUE RECOGNITION

I. Rending of services: "Income from services is included in turnover when the contractual commitment to the customer has been fulfilled and are net of trade discounts, service tax and works contract tax".

II. Interest Income: "interest income is recognized on time proportion basis taking into account amount outstanding and the rate applicable."

III. Dividend Income: "Dividend income on investments is recognized when the right to receive payment is established

(c) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable cost of bringing the asset to working condition for its intended use.

(d) DEPRECIATION

Depreciation is provided on Straight Line Method at rates specified in Schedule XIV of the Companies Act, 1956 as amended vide notification dated 16th December, 1993 issued by the Department of Company Affairs, Government of India.

(e) FOREIGN CURRENCY TRANSACTIONS

Transactions arising in foreign currency are accounted for at the rates closely approximating those ruling on the transaction date.

Amounts payable and receivable in foreign currency are translated at the exchange rate prevailing on the balance sheet date. In respect of forward contract, the forward premium or discount is recognized as income and expenses over the life of contract in the profit and loss account and exchange difference between the exchange rate prevailing at the year end and the date of the inception of the forward exchange contract is recognized as income or expenses in the Profit & Loss Account.

(f) RETIREMENT BENEFITS:

a) Contribution to defined contribution scheme such as Provident Fund is charged to the profit & loss account as incurred.

b) The provision for Gratuity and Leave with wages liability are based on actuarial valuation.

c) Company provides for privilege leaves not availed of by the employees at the end of the year.

(g) AMORTISATION OF MISCELLANEOUS EXPENDITURE

Preliminary and Share issue expenses are amortized over a period of five years.

(h) LEASES

Finance Leases, which effectively transfer to the Lessee substantially all risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease period at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term by credit to liability for an equivalent amount. Lease payments are apportioned between the Finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

(i) Borrowing Cost :

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expense in the statement of profit and loss in the period in which they are incurred.

(j) Provisions, Contingent Liabilities and Contingent Assets : Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements

(k) Use of Estimates : "The preparation of financial statements requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent liabilities at the date of these financial statements and profit & loss statement for the years presented. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected."

(l) Investments : Investments are classified into current and long term investments. Investments are readily realizable and are intended to be held for not more than one year from the date on which such investments are made, are classified as "current investments". All other investments are classified as "long term investment". Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long term investments.

(m) Income Taxes :

I. Current Tax is the tax payable for the period determined in accordance with the provisions of the income tax act 1961. In case of matters under appeal due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

II. In accordance with the AS 22- " Accounting for taxes on Income", the deferred tax for the timing difference between taxable income and accounting income, that originate in one period and capable of reversal in one or more subsequent periods, is accounted for using the tax laws that have been enacted or substantially enacted as of the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty of realization in future. However, when there is unabsorbed depreciation or carry forward of losses under taxation laws, deferred tax assets are recognised only if there is virtual certainty realization of such assets. Such assets are reviewed at each balance sheet date for realisability.

(n) Cenvat Credit : Cenvat credit on raw materials and capital goods has been accounted for by reducing the purchase cost of raw materials and capital goods respectively.

(o) Impairment of Assets

At each Balance Sheet, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in books of accounts.

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Mar 31, 2013

(a) ACCOUNTING CONCEPTS

i) The accounts are prepared on historical cost convention and in accordance with applicable Accounting standards except where otherwise stated. For recognition of Income and Expenses, Mercantile System of Accounting is followed.

(b) REVENUE RECOGNITION

Revenue from sale of goods is recognised upon passage of title to the customers, which generally coincides with their delivery.

(c) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable cost of bringing the asset to working condition for its intended use.

(d) DEPRECIATION

Depreciation is provided on Straight Line Method at rates specified in Schedule XIV of the Companies Act, 1956 as amended vide notification dated 16th December, 1993 issued by the Department of Company Affairs, Government of India.

(e) FOREIGN CURRENCY TRANSACTIONS

Transactions arising in foreign currency are accounted for at the rates closely approximating those ruling on the transaction date.

Amounts payable and receivable in foreign currency are translated at the exchange rate prevailing on the balance sheet date. In respect of forward contract, the forward premium or discount is recognized as income and expenses over the life of contract in the profit and loss account and exchange difference between the exchange rate prevailing at the year end and the date of the inception of the forward exchange contract is recognized as income or expenses in the Profit & Loss Account.

(f) EXCISE DUTY

The Company accounts for excise duty on manufactured goods at the time of their clearance from the factory rather than at the point of manufacture. This has, however, no impact on the operating results of the Company.

(g) INVENTORIES

Inventories are valued as follows:

Raw Material - at lower of cost or net realizable value

Stores & Spare Parts - at lower of cost or net realizable value

Goods Under Process - at lower of cost or net realizable value

Finished Goods - at lower of cost or net realizable value

Cost is determined using FIFO Method (h) RETIREMENT BENEFITS:

a) Contribution to defined contribution scheme such as Provident Fund is charged to the profit & loss account as incurred.

b) The provision for Gratuity and Leave with wages liability are based on actuarial valuation.

c) Company provides for privilege leaves not availed of by the employees at the end of the year.

(i) AMORTISATION OF MISCELLANEOUS EXPENDITURE

Preliminary and Share issue expenses are amortised over a period of five years.

(j) Finance Leases, which effectively transfer to the Lessee substantially all risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease period at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term by credit to liability for an equivalent amount. Lease payments are apportioned between the Finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

(k) Impairment of Assets

At each Balance Sheet an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in books of accounts.

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Mar 31, 2012

(a) ACCOUNTING CONCEPTS

i) The accounts are prepared on historical cost convention and in accordance with applicable Accounting standards except where otherwise stated. For recognition of Income and Expenses, Mercantile System of Accounting is followed.

(b) REVENUE RECOGNITION

Revenue from sale of goods is recognised upon passage of title to the customers, which generally coincides with their delivery.

(c) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable cost of bringing the asset to working condition for its intended use.

(d) DEPRECIATION

Depreciation is provided on Straight Line Method at rates specified in Schedule XIV of the Companies Act, 1956 as amended vide notification dated 16th December, 1993 issued by the Department of Company Affairs, Government of India.

(e) FOREIGN CURRENCY TRANSACTIONS

Transactions arising in foreign currency are accounted for at the rates closely approximating those ruling on the transaction date.

Amounts payable and receivable in foreign currency are translated at the exchange rate prevailing on the balance sheet date. In respect of forward contract, the forward premium or discount is recognized as income and expenses over the life of contract in the profit and loss account and exchange difference between the exchange rate prevailing at the year end and the date of the inception of the forward exchange contract is recognized as income or expenses in the Profit & Loss Account.

(f) EXCISE DUTY

The Company accounts for excise duty on manufactured goods at the time of their clearance from the factory rather than at the point of manufacture. This has, however, no impact on the operating results of the Company.

(g) INVENTORIES

Inventories are valued as follows:

Raw Material - at lower of cost or net realizable value

Stores & Spare Parts - at lower of cost or net realizable value

Goods Under Process - at lower of cost or net realizable value

Finished Goods - at lower of cost or net realizable value

Cost is determined using FIFO Method

(h) RETIREMENT BENEFITS:

a) Contribution to defined contribution scheme such as Provident Fund is charged to the profit & loss account as incurred.

b) The provision for Gratuity and Leave with wages liability are based on actuarial valuation.

c) Company provides for privilege leaves not availed of by the employees at the end of the year.

(i) AMORTISATION OF MISCELLANEOUS EXPENDITURE

Preliminary and Share issue expenses are amortised over a period to five years.

(j) Finance Leases, which effectively transfer to the Lessee substantially all risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease period at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term by credit to liability for an equivalent amount. Lease payments are apportioned between the Finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

(k) Impairment of Assets

At each Balance Sheet an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in books of accounts.

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Mar 31, 2010

(a) ACCOUNTING CONCEPTS

The accounts are prepared on historical cost convention and in accordance with applicable Accounting standards except where otherwise stated. For recognition of Income and Expenses, Mercantile System of Accounting is followed.

(b) REVENUE RECOGNITION

Revenue from sale of goods is recognised upon passage of title to the customers, which generally coincides with their delivery.

(c) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable cost of bringing the asset to working condition for its intended use.

(d) DEPRECIATION

Depreciation is provided on Straight Line Method at rates specified in Schedule XIV of the Companies Act, 1956 as amended vide notification dated 16th December, 1993 issued by the Department of Company Affairs, Government of India.

(e) FOREIGN CURRENCY TRANSACTIONS

Transactions arising in foreign currency are accounted for at the rates closely approximating those ruling on the transaction date.

Amounts payable and receivable in foreign currency are translated at the exchange rate prevailing on the balance sheet date. In respect of forward contract, the forward premium or discount is recognized as income and expenses over the life of contract in the profit and loss account and exchange difference between the exchange rate prevailing at the year end and the date of the inception of the forward exchange contract is recognized as income or expenses in the Profit & Loss Account.

(f) EXCISE DUTY

The Company accounts for excise duty on manufactured goods at the time of their clearance from the factory rather than at the point of manufacture. This has, however, no impact on the operating results of the Company.

(g) INVENTORIES

Inventories are valued as follows:

Raw Material - at lower of cost or net realizable value

Stores & Spare Parts - at lower of cost or net realizable value

Goods Under Process - at lower of cost or net realizable value

Finished Goods - at lower of cost or net realizable value

Cost is determined using FIFO Method

(h) RETIREMENT BENEFITS:

Gratuity & Leave Encashment

The provisions in accounts of Gratuity and Leave encashment liability are based on actuarial valuation. Provident Fund Regular monthly contributions are made to Provident Funds, which are charged against revenue.

(i) AMORTISATION OF MISCELLANEOUS EXPENDITURE

Preliminary and Share issue expenses are amortised over a period to five years.

(j) Finance Leases, which effectively transfer to the Lessee substantially all risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease period at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term by credit to liability for an equivalent amount. Lease payments are apportioned between the Finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

(j) Impairment of Assets

At each Balance Sheet an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in books of accounts.